Court: Uber Drivers Must Go Through Arbitration

Uber has been going in reverse lately, but is about to turn a big corner.

After agreeing to pay $148 million in a privacy case this week, the ride-hailing company got some good news in another. In O'Connor v. Uber Technologies, the U.S. Ninth Circuit Court of Appeals said Uber drivers are bound by their arbitration agreements.

That means their class actions are headed for a dead end. Uber drivers will have to fight their battles one at a time.

No Class Action

Class action attorneys have lived on Uber cases, litigating claims around the country that the company treats its drivers like employees but pays them as if they were independent contractors.

The Ninth Circuit said nothing about that. But without potential class-action payouts, Uber drivers may be hard-pressed to find lawyers to take their individual wage cases.

Shannon Liss-Riordan, a champion of class-actions against Uber, has vowed to fight on. Although she lost at the Ninth Circuit, she said she will go through arbitration if she has to.

"We are urging all Uber drivers who want to pursue these misclassification claims to contact us immediately to sign up for individual arbitration," she told Ars Technica. "If Uber wants to resolve these disputes one by one, we are ready to do that -- one by one."

Small Claims

The Ninth Circuit ruling does not mean the death of the drivers' claims. In some cases, Uber and the drivers may opt out of the arbitration agreements.

However, the value of individual claims will be small compared to the class-action collective. Last month, for example, Uber settled a class action with drivers for $345,622.